Question: My question is concerning Health Insurance. Because the standard of living is increasing daily, especially medical expenses and some medical institutions are only attending to patients who are covered by medical insurance (especially when you travel), people are advising that having Medical Insurance is like having gas in your car, it is very important. What is the ruling concerning this?

Please note, what you pay per month is your coverage, if you never claim you lose your money, the insurance company claims that it does not have anything to do with investment or interest. Would it be permissible for muslims to have Medical Insurance and only claim according to the amount they have paid into the plan?

Answer: Health Insurance, like other forms of insurance fall under the same prohibition which has been given in Islam. In other words, although conventional insurance seeks to provide security/compensation to what is valuable in the event of its loss, damage or destruction, owing to its practices, it is forbidden in Islam.

The reason for this prohibition is that in Insurance, the elements of gambling and interest are found. Gambling itself is totally unlawful in Islam and has been condemned in the Holy Quran. The aspect of gambling which is present in insurance is that of risk (khatar) and uncertainty (gharar).

In the case of risk in conventional insurance, we see that the participant contributes a small amount of premium in the hope/risk of gaining a large sum. In the case of uncertainty, we see that the participant loses the money paid (in the premiums) when the insured event does not take place. The company on the other hand will be in a deficit (or may even go to bankruptcy), if the claims are higher than the amount contributed by the participants.

With respect to the presence of interest, this exists in lending or borrowing funds, and other related practices in the activities of conventional insurance. Seeing that health insurance operates on the same principles, (that is, the companies offering health insurance plans function in the same manner), it would not be permissible to enter into a Medical insurance plan.

The allowance which may be granted will be based on the case of need/necessity or the law of the land. In other words, if it is the law of a country, then one would be allowed to have a medical insurance to the extent that the law is fulfilled. An example of this is that of having a car insurance which is compulsory in our country.

Similarly, if the Medical Institutions of a certain country are not willing to look after patients until they have their medical plans, then it will be allowed to have one in other to fulfill this necessity. When the above does not exist and a person has a choice in taking out a plan or not, then it will not be permissible to go into that which is prohibited by taking out a Medical Insurance plan.

While some institutions (Medical) may not look after patients who do not posses a Medical plan, there are many who do not have this as a requirement. As such, this will not be a case of need/necessity.

'Having a Medical Insurance plan is like gas in the car', is an exagerated statement which holds no truth in it. There are thousands of Muslims who live their lives without having a Medical plan.

Having a Medical Insurance in order to use only that which you have paid into it is almost the same as saving your money to use it at your convenience. Hence, there is no need to enter into a transaction which has prohibited elements in it for the sake of using your own money. If however, one is already in such a plan, then it is upon him to use only that amount which he has placed into the plan.


And Allah knows best.
Mufti Waseem Khan